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UK government warns Sports Direct it will act if wage laws flouted

By
Reuters
Published
today Dec 15, 2015
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Sports Direct, the British sportswear retailer controlled by high profile businessman Mike Ashley, came under fire in the British parliament on Monday over allegations it has not been paying the minimum wage.

The FTSE 100 company has been in the spotlight after the Guardian newspaper reported last Thursday that lengthy and unpaid security checks of staff at its main warehouse in Shirebrook, central England, meant that some workers effectively earned less than legal levels.


Sports Direct said on Monday it believed it was in compliance with minimum wage regulations and took its responsibilities extremely seriously.

Nick Boles, a government minister within the business, innovation and skills department, was summoned by a lawmaker for the opposition Labour Party, Chuka Umunna, to answer an urgent question on the wage position at the company.

"I don't care how famous an employer is, I don't care how well connected they are, I don't care frankly how much money they have made, they need to obey the law," Boles told Britain's lower house of parliament, the House of Commons, to muted cheers.

"If they don't obey the law we will enforce the law, we will fine them and disqualify the directors if necessary."

British lawmakers can put urgent questions to government ministers if a matter of public importance has arisen, which the lawmaker believes requires an immediate answer.

Umunna told the minister: "We know enough about the practices at Sports Direct ... to conclude that this company is a bad advert for British business and one with a culture of fear in the work place."

Boles acknowledged that Sports Direct, as Britain's biggest sportswear and sporting goods company, was a major employer with many staff content with their jobs.

But he said: "I'm absolutely certain that when faced with the kind of enforcement action that I have set out, that any employer ... will want to sort themselves out."

Last week's Guardian report was only the latest criticism of Sports Direct, run by Ashley, who is also the owner of Newcastle United soccer club.

The group was criticized earlier this year for the way it treated some staff and suppliers, with lawmakers saying it behaved like a "backstreet outfit".

Ashley had also irked lawmakers in March telling them he was unavailable to answer questions over the treatment of workers at a Sports Direct subsidiary.

"We don't necessarily recognize the company that is being portrayed and we need to do a better job in making sure our story gets across," Chief Executive Dave Forney told Reuters last Thursday.
 

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